South Plains Financial, Inc. · NASDAQ:SPFI
South Plains Financial — IPO Roadshow (April 2019)
26 slides from South Plains Financial's IPO roadshow presentation, Apr 29, 2019
Slide 1: Initial Public Offering South Plains Financial, Inc.
0 Initial Public Offering South Plains Financial, Inc. (NASDAQ: SPFI)
Slide 2: Safe Harbor and Disclaimers
1 Safe Harbor and Disclaimers South Plains Financial, Inc. (“South Plains”, “the Company” or “we”) has filed a registration statement (including a prospectus, which is preliminary and subject to completion) with the U.S. Securities and Exchange Commission (the “SEC”) for the offering to which this p
Slide 3: Offering Summary
2 Offering Summary Issuer Ticker / Exchange Base Offering Size Base Shares Offered Overallotment Option Filing Range Lock-Ups Use of Proceeds Joint Bookrunning Managers Expected Pricing Date South Plains Financial, Inc. SPFI / Nasdaq Global Select $63 million comprised of $50 million primary and $13
Slide 4: Today's Presenters
3 Today’s Presenters Curtis C. Griffith Chairman and Chief Executive Officer Cory T. Newsom President Kevin R. Bass Chief Credit Officer Steven B. Crockett Chief Financial Officer and Treasurer
Slide 5: A Leading West Texas Franchise
4 Balance Sheet Total assets $2,713 Gross loans held for investment 1,957 Total deposits 2,277 Noninterest-bearing deposits 510 Core deposits(1) 2,058 Tangible shareholders' equity (2) (5) 213 Loans to deposits 86.6% Profitability Net Income (3) $20.8 Return on average assets (3) 0.79% Return on ave
Slide 6: Our History and Growth Profile
5 Our History and Growth Profile Gross Loans Held for Investment Deposits Note: Financial data as of December 31 of each respective year. $2,335 $2,537 $2,501 $2,573 $2,713 2014 2015 2016 2017 2018 $1,550 $1,679 $1,661 $1,838 $1,957 2014 2015 2016 2017 2018 $2,033 $2,127 $2,091 $2,154 $2,277 2014 20
Slide 7: Experienced Management Team
6 Experienced Management Team Name Title Age Years with SPFI / City Bank History and Experience Curtis C. Griffith Chairman & Chief Executive Officer 66 47 _ Elected to the board of directors of Texas-based First State Bank of Morton in 1972 _ Became employed by the Bank in 1979 and was elected Chai
Slide 8: Outside Directors
7 Outside Directors Name Title Years with SPFI / City Bank History and Experience Richard “Danny” Campbell Lead Director 8 _ Director of the Company and Bank since 2011 _ Executive officer and investment team leader for the Henry Family Office, which he joined in May of 2007 bringing 26 years of oil
Slide 9: Investment Highlights
8 Emphasize Community Banking _ Significant market share and brand recognition in the smaller markets we serve _ Leverage our relationship-based platform in higher growth metropolitan markets such as Dallas and Houston Enterprise Risk Management _ Implemented a rigorous enterprise risk management, o
Slide 10: Our Markets
9 Our Markets Note: Deposit data as of 12/31/2018. Dollars in millions. Market Branches Market Highlights Lubbock / South Plains 12 $1,699 _ Population in excess of 315,000 with major industries in agribusiness, education, and trade among others _ Home of Texas Tech University – enrollment of 35,000
Slide 11: Lubbock, Texas – Our Home Market
10 Lubbock, Texas – Our Home Market Source: Forbes, bls.gov, and lubbockchamber.com Note: Deposit data as of 6/30/2018 per FDIC. Economy _ Major industries include agriculture – primarily cotton, corn, and grain sorghum – as well as education, trade and transportation, health services and government
Slide 12: Priority Expansion Markets – West Texas
11 Priority Expansion Markets – West Texas Source: Odessa-tx.gov, U.S. Department of Energy. Midland / Odessa _ Located along Permian Basin, which is a petroleum rich area that extends into the South Plains region of Lubbock and west into the southeastern portion of New Mexico _ The Permian Basin ha
Slide 13: Acquisition Strategy
12 Acquisition Strategy _ We plan to take advantage of acquisition opportunities, and use a combination of public stock and cash to become the acquirer of choice in West Texas _ Catalysts for acquisition activity include management succession, shareholder liquidity needs, scale, and excessive regula
Slide 14: Low Cost Deposit Franchise
13 NOW & Other Trans. Accounts 12% Noninterest- Bearing 22% MMDA & Other Savings 48% Brokered Deposits 4% Jumbo Time Deposits 6% Retail Time Deposits 8% Low Cost Deposit Franchise Deposit Mix Over Time Deposit Composition as of December 31, 2018 _ Core deposits(1) totaled $2.1 billion, or 90.4% of t
Slide 15: Diversified Revenue Stream
14 Diversified Revenue Stream Net Interest Income 65% Noninterest Income 35% Total Revenues 2018: $147.7 million Mortgage 41% Insurance 14% Trust 3% Investment Services 3% Interchange Fees 17% Service Charges on Deposits 15% Other 7% Noninterest Income 2018: $52.1 million For the Year Ended December
Slide 16: Well-Balanced Loan Portfolio
15 Commercial Real Estate, Non-Ow ner Occupied 20% Commercial Construction 7% Commercial Real Estate, Ow ner Occupied 11% Other Commercial - General 11% Agricultural Production 8% Farmland 3% Energy 1% Finance, Investment, and Insurance 3% 1-4 Family Residential 18% Automotive 10% Other Consumer 4%
Slide 17: Conservative Credit Culture
16 Conservative Credit Culture Nonperforming Assets to Loans and OREO Net Charge-Offs to Average Loans Allowance for Loan Losses to Gross Loans Allowance for Loan Losses to Nonperforming Loans Financial data is as of or for the twelve months ended December 31 of each respective year. 1.81% 0.98% 0.9
Slide 18: Historical Performance
17 Historical Performance Return on Average Assets(1) Return on Average Equity(1)(2) Note: Financial data is as of December 31 of each respective year. (1) Profitability metrics are tax adjusted as if the Company were a C Corporation for each of the periods presented. (2) Reflects the company’s pro
Slide 19: Strong Capital Base
18 Strong Capital Base Tangible Common Equity to Tangible Assets(1)(2) Tier 1 Risk-Based Capital Ratio Tier 1 Leverage Ratio Total Risk-Based Capital Ratio Note: Financial data is for the twelve months ended December 31 of each respective year. (1) Non-GAAP financial measure. We did not have any goo
Slide 20: Pro Forma Capitalization
19 Pro Forma Capitalization (1) Shown on an as-adjusted basis giving effect to (i) the ESOP Repurchase Right Termination (as defined in the Registration Statement) as if it had occurred on December 31, 2018 and (ii) the sale of 2,700,000 shares of common stock by us in the offering and the receipt o
Slide 21: Recent Developments
20 Recent Developments For the three months ended March 31, Earnings 2018 2019 Net income $4.6 million $4.8 million Earnings per share (diluted) $0.31 $0.32 Return on average assets 0.73% 0.71% Return on average equity (1) 8.73% 8.98% _ Due to the seasonality of our agricultural production loans, we
Slide 22: Recap of Franchise Highlights
21 Recap of Franchise Highlights Continued emphasis on community banking Enterprise risk management system has improved internal processes Consistent focus on organic growth Become the acquirer of choice in West Texas Built-in operating leverage will improve efficiency over time Management, employee
Slide 23: Appendix
22 Appendix
Slide 24: Selected Financial Highlights
23 Selected Financial Highlights (1) The Company calculates its pro forma C Corporation net income, return on average assets, return on average shareholders’ equity and earnings per share by adding back its franchise S Corporation tax to net income, and using tax rate for Federal income taxes of 35.
Slide 25: Selected Financial Highlights (Continued)
24 Selected Financial Highlights (Continued) (1) The Company calculates its pro forma C Corporation net income, return on average assets, return on average shareholders’ equity and earnings per common share by adding back its franchise S Corporation tax to net income, and using tax rate for Federal
Slide 26: South Plains Financial, Inc.
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